Escaping the Strait Jacket

Beyond deficit reduction, the number one economic and social priority for the Coalition should be to encourage job creation. In ESCAPING THE STRAIT JACKET – Ten regulatory reforms to create jobs, published on Wednesday 16 November by the Centre for Policy Studies, Dominic Raab MP details ten regulatory reforms to encourage job creation in the private sector.

Raab:

Explains that in 2011, British business will spend £112 billion to comply with the administrative requirements of employment legislation – the equivalent of 7.9% of Gross Domestic Product

Shows that the costs of compliance are disproportionately high for smaller firms, often crushing the spirit of enterprise

Argues that there is a trade-off between increasing employees’ rights and entitlements on the one hand, and denying job opportunities to the millions now seeking work on the other.

Provides seven changes to domestic legislation and regulations, and three changes to EU agreements, which could stimulate job creation.

Having consulted business groups as well as a number of legal experts in the field, Raab outlines 10 specific policy areas where progress could be made:

REFORM OF DOMESTIC REGULATION

1) Exclude small businesses from a range of regulations, including: minimum wage legislation for those under 21; the extension of flexible working regulations; requests for time off for training; and pension auto-enrolment.

2) Create a new ‘no fault dismissal’ for underperforming employees after two years of employment, which would work in parallel to ‘unfair dismissal’ (unlike the Beecroft proposal)

3) Strengthen the power of tribunals to strike out claims (or parts of claims) which have no reasonable prospect of success, and increasing the deposits required for weak claims.